Saturday, 10 May 2008

"When will it ever end?"

Another day, another set of bid news and rumour affecting the UK quoted SITS sector.

Intec Telecom Systems issued the usual "approach which may or may not lead to a bid" statement. Shares soared on the news but gave up some of the gain on Friday to end on 54p - 20% higher than the pre bid price. Telecomms software companies are one of the 'flavours of the month" after Axiom and Jacobs Rimmell. See my earlier piece Consolidation in telco software too.

Blinkx also soared on speculation that a) they might list on NASDAQ 2) that they were about to get a bid at 60p from News Corp. However, on Friday Blinkx issued a statement saying that they were unaware of any talks. Even though they gave up some of the gain on the announcememt, Blinkx still managed to end the week 70% higher at 32p. I've declared before that I was a buyer of Blinkx on their IPO last year at 45p. It was my worst performing share of 2007 and managed to compound the misery by being my worst performing share in 2008 YTD too! So, I am just a little happy about this turn of affairs. I have oft said that Blinkx will get bought at a significant premium for its video search technology. I have not changed my opinion!

Misys also benefitted from bid rumour mongering. As the Independent said "vague bid rumours gave a boost to Misys, the software specialist that rose by 9.25p to 174.25p. The chatter suggested that the company may soon be subject to a bid; there were no clues about the identity of the bidder, but the talk bore a price of between 200p and 210p."

Flomerics, perversely, soared 15% to 102p after announcing that its bid talks with Mentor Graphics were off! David Mann (non executive chairman who was CEO of Logica before both Andy Green and Martin Read) however said he was exploring interest from several other parties.
Flomerics supplies simulation software to the engineering and electronics industries with clients such as IBM, Siemens and Nokia. Latest FY revenues were £16.3m with a pretax loss of £1.3m.

Excluding the 'rumours' listed above, bid announcements have been made by 16 UK quoted SITS companies in 2008 to date. A Holway all time record. As I have said before, the only thing that will stem this flood is that we will soon run out of quoted SITS companies to acquire. But not yet. I could easily identify another dozen companies that I reckon could easily become bid targets before too long.

Note - Megabuyte has a very good table of the recent takeovers and current bids which you can download Click here.

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